February 19, 2013

Fantasy Beat

Budget Allocation in Expert Auctions

by Jason Collette

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Paul Sporer and I have a special email address, fantasyhour@baseballprospectus.com, through which listeners send us emails that they would like us to either respond to privately or address on the weekly Towers of Power Fantasy Hour (or 2) podcast. That inbox was very busy when we first opened it in mid-2012, but business tapered off to a trickle as the baseball season ended and was nearly extinct through the winter holidays. Once the calendar flipped to 2013, people re-discovered the mailbox, and the two of us were flooded with trade and keeper advice requests. Recently, we’ve received several inquiries from people that are starting up auction leagues and wondering how to best allocate their fantasy dollars at the bidding table.

The short answer to that question is that it has no correct answer. The standard approach is to allocate 70 percent of your budget to hitting and 30 percent of it to pitching. As fate would have it, the aggregate splits from the 2012 LABR and ToutWars auction were precisely 70/30 last season. Despite the clean-cut aggregate figures, though, the results within vary greatly. One owner spent 88 percent of his budget on hitting and finished in 10^th place, but several years ago, Jeff Ma spent 52 percent of his budget on pitching and nearly won the mixed league. Whatever amount you decide on before the auction begins is fine, but you should also be prepared to adjust to auction dynamics, because it takes just one or two wiseacres to throw an auction for a loop as they attempt to corner a specific statistical market.  With that said, let’s review how the experts did in their auctions last season.

There are five March auctions on the expert circuit, the AL and NL leagues in both LABR and Tout Wars, plus the mixed league format auction in Tout Wars. As I mentioned, the aggregate split was 70/30 with a standard $260 budget. Both NL leagues were identical, and the mixed league followed suit. The only variety was within the AL auctions:

Overall, 65 teams participated in the auctions, and the percentage of auction dollars used to acquire pitching varied greatly.

Just six of the 65 teams spent exactly 30 percent of their auction dollars on pitching, and only 15 of 65 were within one percentage point of the aggregate. While there are 65 teams in these auctions, it should be noted that there are not 65 different owners, as several owners double- and even triple-dip in the leagues. Here is how those owners allocated their budgets in their auctions:

Only Derek Carty and I were consistent between our drafts; others swung anywhere from one to 10 percentage points between their LABR and Tout auctions.

Lastly, how did the splits correlate to where each teams finished in the final standings? The draft is a very important part of any successful or dreadful fantasy season, but it is not the only way to boost or tank a team. The correlation between dollar allocations and final standings is, at best, weak, because of the mitigating factors after the auction. That said, this how the splits played out against the final 2012 standings:

The scatterplot shows just how weak the correlation is and emphasizes that the players on which you choose to spend matter much more than your overall budget distribution. The team that spent the most on pitching finished fifth, while the team that severely emphasized offense finished 10^th.

To summarize, what’s most important is to be prepared and flexible with your budgetary plans. My own strategy is planning dollar amounts on a 69/31 budget and adjusting at the auction table on my spreadsheet. While I came out with a 69/31 split in both expert auctions, I went with an extreme, 82/18 split in a local NL league due to auction dynamics, as a heavy focus on offense resulted in pitching bargains.

Jason Collette is an author of Baseball Prospectus. 
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